Dean Ridlon – Head-Investor Relations Louis Hernandez Jr. – Chairman and Chief Executive Officer Brian Agle – Senior Vice President and Chief Financial Officer

Steven Frankel – Dougherty Matt Galinko – Sidoti Hamed Khorsand – BWS Financials

Good day and welcome to the Avid Third Quarter 2017 Earnings Release Call. Today’s conference is being recorded. And at this time, I’d like to turn the conference over to Dean Ridlon, Head of Investor Relations. Please go ahead.

Thank you, Matt. And good evening everyone. I am Dean Ridlon, Vice President of Investor Relations at Avid Technology. Welcome to our Q3 2017 earnings call. With me today are Louis Hernandez Jr., Avid's Chairman and CEO; and Brian Agle, Avid’s Senior Vice President and Chief Financial Officer. On our call today, we will be using both non-GAAP measures and certain operational metrics, both of which are defined in our Form 8-K and supplemental financial and operational datasheet available on our Investor Relations webpage. These non-GAAP measures are also reconciled with GAAP measures in the slide deck that accompanies this call, the tables to our press release and in the supplemental financial and operational datasheet available on the Investor Relations section of our website. I would also like to remind you that certain statements made on this call are considered forward-looking statements within the meaning of the securities laws such as, for example, statements about expected future operating results and financial performance and the progress of our transformation. Forward-looking statements are inherently uncertain, not guarantees of future performance and are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Any forward-looking information relayed on this call speaks only as of this date and we undertake no obligation to update the information, except as required by law. For additional information, including a discussion of some of the key risks and uncertainties associated with these forward-looking statements, please see the Forward-Looking Statements section of our press release issued today as well as the Risk Factors and Forward-Looking Statements sections of our 2016 Annual Report on Form 10-K available with the SEC, the Avid Technology website or our Investor Relations department. We've also added a supplemental presentation in an effort to complement today's narrative. We hope that you will find it helpful. We will be recording today's call, which will be made available for a two-week replay. You may replay this conference call and access the supplemental presentations by going to the Investor Relations page of our website and clicking the Events & Presentations tab. Later, we will be conducting a question-and-answer session and instructions will be given at that time. Before we begin I would like to invite you to attend our Investor Day on December 5 beginning at 10:00 AM. We’ll be holding the day at the Palace Hotel in New York and providing a tour of NBC’s facilities of Rockefeller Center. If you would like to attend, please RSCP to me. And now I’d like to turn the call over to our Chairman and Chief Executive Officer, Louis Hernandez Jr. Louis Hernandez Jr.: Thank you Dean. Hello everyone. Thank you for joining us today. I’m going to turn to Slide 7 of the presentation. I'm pleased to report that we met or exceeded guidance for all of key metrics this quarter. Bookings and operational revenue exceeded our guidance, while we performed in line with guidance for constant currency bookings, non-GAAP operating expenses, adjusted EBITDA and adjusted free cash flow. Excluding Greater China, our bookings grew 21% year-over-year and 5% sequentially. Operational revenue, which excludes the historical impact of the 2011 amortization and the elimination of the implied PCS revenue grew 3% year-over-year and sequentially. And all that growth was organic. Our core operational model continues to strengthen and the impact on profitability and cash flow is becoming significantly more pronounced. Operationally adjusted EBITDA more than doubled from a year ago, an increase of 34% sequentially. And we are encouraged by the cash flow characteristics of that EBITDA. This is our fourth consecutive quarter of positive adjusted free cash flow. Year-to-date, we've generated $13.5 million of adjusted free cash, an improvement of $55.7 million from last year, representing a 44% conversion of operational adjusted EBITDA to cash flow. Underpinning our financial performance this quarter was the continued achievement of our strategic objective focused on enterprise and individual customers. Enterprise customers continue to embrace MediaCentral as the industry's only cloud-enabled enterprise platform for media. This quarter we signed several large enterprises deal further validating our strategy. The MediaCentral enterprise deals are typically bundled with a handful of applications and over time our account management team works to increase the lifetime value of these accounts by cross selling additional modules and services. In the individual market, we’re seeing broad adoption of our cloud-enabled creative tools offering with successful pricing. This quarter we saw a surge in paid subscriptions and digital sales, this is driven by increased digital marketing efforts the hundreds of thousands of aspiring artists that have taken advantage of our introductory first offerings which have been converting to paid sales and the artist community, a cloud based LinkedIn meets Facebook type of offering which allows professionals to connect, create and share their creative professional driving demand for our cloud-enabled creative tool. On cloud alliance with Microsoft continues to press well and we remain very excited about the long-term possibilities of this relationship. And finally, our transition to a more recurring business with a leaner, more direct comp structure is yielding more stable and predictable revenue and earnings model. And it also positions us well for future profitable growth. In fact our booking mix continues to reinforce to shift to a more recurring business model. Recurring revenue booking this quarter were 41% of total bookings and grew 15% from a year ago. And this is contributing meaningfully to the improved visibility going into a quarter. In fact we have visibility in the range of between 70% and 80% of revenue going into a given quarter. I’ll turn now to Slide 8. Our strategy is driving growth and visibility in our financial model. If you turn to the upper left of this chart you can see continued strong growth in the MediaCentral platform. This is the adoption by large media enterprises of this enterprise wide operating system that allows them to drive down cost while accessing the best three tools at each step of the value chain. We've grown this pace to over 500,000 licensed users – I'm sorry 50,000 licensed users representing 27% growth from a year ago. New technologies like 4K, graphic, augmented reality, et cetera they create a new decision point for these clients. And we can accommodate these technologies much more efficiently than the legacy way of combining individual proprietary technologies that are much more expensive and complicated to maintain. And this also provides a good environment for account managers who then go cross sell additional products and services thereby increasing the lifetime value of these relationships. In the upper right you can see the growth of paying cloud enabled subscribers and digital bookings up 69% and 35% respectively. This growth validate our strategy for individual, creative and small work group. We believe we have significant market penetration ahead of us in this segment. The bottom half of the slide you can see our strategy is contributing to the financial model where there is more recurring and we have greater visibility. Bottom left you can see the increase we've had in the shift and recurring bookings, recurring bookings – recurring revenue bookings, I'm sorry, were 41% of the total bookings for the quarter and over 50% of total bookings on an LTM basis. This is a significant increase over where we started, before the transformation we were about 13% and is attributable to the successful transition in which our enterprise customers are moving to multi-year enterprise agreement and individuals to subscription based purchases. Bottom right you can see the total revenue backlog, we've amassed to $488 million of which $293 million is contractually committed backlog. This backlog is providing a significantly higher degree of visibility into our future results and creating more predictable revenue model as we move to our next phase of growth. I'm going to turn to Page 9 now, Slide 9 and I’ll just provide a little bit more color before it turned over to Brian on the momentum of our strategy on both the enterprise and individual. Since the beginning of the year we have signed several large multi-year enterprise deals. This quarter we continue that momentum including deals that NHK Japanese public broadcaster and a global leader and Viacom one of the world's largest media companies operating in 170 networks, that reach over 700 million subscribers worldwide. With NHK our agreement includes the first official 4K/UHD production workflows and the agreement includes MediaCentral, Media Composer, DNxIQ with high spec workstations systems NEXIS with significant storage needs for that 4K workflow, as well as bundled services. With Viacom we signed a five-year enterprise agreement with several applications designed to reduce their total cost of ownership. By offering MediaCentral bundled with these market leading applications, we leverage the enterprise pricing models in our – we fell are very uniquely positioned to expand our heritage customer base to more of these more expansive, long-term, higher value, arrangement. These transactions allow client to get the best tools at every step of the media value chain, all integrated more efficiently into a common services platform. These applications can be from Avid or from one of the over 2,000 certified third-party apps that are currently available. In the individual market, customers are eager to use the industry's most powerful and recognized tools at a price point that is successful to them. Our Media Composer First and Pro Tools First product are proving to be very powerful and low cost acquisition tools for this market. The initial launch of Pro Tools First resulted in hundreds of thousands of download. We then launched Media Composer First on the video side, just a few months ago and already have had over one 100,000 downloads. The conversion rates to digital purchases and subscriptions from these three premium version have been strong. This along with the artist community, which I mentioned earlier, has helped fuel the continued growth of paid cloud-enabled subscription base. Unlike enterprise sales once individuals are on the platform, we cross sell additional applications and plugins via our app store. So now that I've highlighted our results in our strategy, let me turn it over to Brian to review a more detailed financial results. Brian?

Thank you Louis and good afternoon everyone. Let's turn to Slide 11. We were pleased with our third quarter having met or exceeded guidance on all metrics. In particular, bookings and revenue were favorable to our guidance, constant bookings, non-GAAP operating expenses, adjusted EBTIDA and adjusted free cash flow all fell within the guidance range. Let's move to Slide 12 to discuss to Q3 results in more detail. We were happy to see top line and bottom line growth this quarter, excluding Greater China bookings on a constant currency basis were 107.9 million an increased 19% year-over-year and 3% sequentially. Excluding Greater China, bookings were 102.8 million and increase of 21% year-over-year and 5% sequentially. Non-GAAP revenue was $105.3 million for the third quarter up 3% sequentially, excluding the impact of the pre-2011 revenue amortization and elimination of implied post-contract support or PCS, revenue grew 3% both year-over-year and sequentially. The impact of pre-2011 revenue amortization and the elimination of PCS was immaterial, giving a simpler view into our financial results this quarter and going forward. Non-GAAP gross margin percentage adjusted for the impact of pre-2011 and elimination of PCS was 59.2%, this is flat on a year-over-year basis. We had strong product shipments in the quarter that have a higher hardware content including products related to our Pro Tools HD family, as well as console and control services product families. Non-GAAP operating expenses in the quarter were $53.9 million. Our non-GAAP operating expenses decrease $4.5 million year-over-year or 8% and decrease $2.7 million sequentially or 5%. Q3 expenses included a $1.6 million non-cash expense related – expenses charge related to foreign exchange revaluation and higher legal expenses related to our lawsuit with Harmonic, which we have now settled. Operational adjusted EBITDA of $11.4 million for the quarter was up 34% sequentially. Excluding the impact of the pre-2011 revenue amortization and the elimination of implied PCS, adjusted EBTIDA was up 107% year-over-year. Adjusted EBTIDA margin as a percentage of revenue was 11%. We note a year-on-year improvement of $3.2 million on adjusted free cash flow. I’ll talk more about the progress we’re making with the adjusted free cash flow in a bit. Now to Slide 13. Similar to what we have shared in the past, we provide the breakout of Greater China and rest of world bookings by quarter. We are very pleased with bookings growth of 21% on a year-over-year basis. Moving to Slide 14. We have completed the 2017 efficiency program allowing an additional $30 million of savings on top of the already $76 million savings we achieved last year. We have done this by leveraging the development platform, enabling more opportunities for talent alignment and related facilities rationalization. Moving to the balance sheet, on Slide 15. At September 30, 2017, we had cash of $44.1 million and $5 million undrawn revolver total liquidity of $49.1 million. Our accounts receivable balance was $40.9 million, inventory was down $14.4 million year-over-year to $41.2 million and flat sequentially, with an inventory turn ratio of four times. At the end of Q3 long-term debt was $191.3 million. As outlined at the beginning of the year our amended agreement with server has provided more favorable leverage ratio requirement for future periods beginning last quarter. We were well within our covenant leverage were as of Q3. At September 30, 2017 total revenue backlog was $488 million. Total revenue backlog excluding pre-2011 and elimination of PCS grew $6.8 million year-over-year and was flat sequentially. More of our quarterly recognized revenue was coming directly from contractually committed backlog. Overall in Q3 72% of our recognized revenue came from June 30, 2017 deferred revenue and contractually committed back. Now to Slide 16. As I mentioned, we had strong visibility into Q3 revenue at beginning of the quarter. This visibility which is now between 70% and 80% of revenue in a given quarter, includes the conversion of deferred revenue which are orders that have been booked, and invoiced and contractually committed backlog which are orders that have already been booked but not yet billed or shipped. The remaining 20% to 30% of revenue comes from current quarter bookings, in which the revenue conversion can vary based on volume and mix of those bookings. Now to Slide 17. Adjusted free cash flow increased $3.2 million year-over-year to $537,000. We are pleased that this is the fourth quarter of consecutive positive adjusted free cash flow. The increase was driven by continued business execution, as well as our efficiency program and working capital optimization. A few points to note, the 2016 bonus payment of $9 million has been paid early in Q4 and is reflected in the Q4 guidance. When we provided Q3 guidance, we anticipated in October payout for the 2016 bonus separately while the Jetsen met their Q3 – excuse me their minimum Q3 cash payment it was delayed into the first week of Q4. Therefore the Q3 cash flow does not include Jetsen’s Q3 cash from [indiscernible]. Please turn to Slide 18. If you look at the year-to-date adjusted free cash flow the improvement of $55.7 million year-over-year is even more dramatic. Now to Slide 19. Consistent with prior quarters, we've provided details of free cash flow and adjustment free cash flow. In the current quarter our free cash flow improved $3.2 million over last year. Q3 three 2017 non-recurring items were higher than expected due to a higher restructuring payment. We expect need non-recurring items to be lower in Q4 2017. Capital expenditure level from Q3 are more consistent with our historic lending patterns. We invest in capital as needs arise or balance that with tight cash controls. Turning to Slide 20. I'd like to briefly discuss the Harmonic litigation settlement and provide an update on Jetsen. We recently settled our patent infringement litigation with Harmonic. As part of the settlement, we received payments totaling $63 million from Harmonic. The first payment of $2.5 million was received on October 24. The balance we paid in two installments of $1.5 million in 2019 and $2 million in 2020. We expect majority of the settlement to impact our Q4 2017 financials. We are pleased to have favorably resolved this litigation. Turning to Jetsen, the climate in China continues to be challenging, particularly after the recent elections. In Q3 Jetsen met their minimal delivery commitment although as I mentioned the minimum cash payment was not received until early Q4 due to a Chinese national holiday. We do not anticipate Jetsen will meet its 27 annual minimums. Additionally, we do not expect Jetsen to do equity investment in 2017. Turning to Slide 21, we are pleased to announce we have expanded our debt facility with an additional $20 million of liquidity, $15 million in cash and $5 million it is an additional line of credit. This additional cash and liquidity is a less expensive source of cash, compared to the Jetsen equity investment. We have also amended the leverage ratio requirement in order to add back the expected deferred revenue haircut related to our adoption ASC 606 in 2018. Turning to Slide 22. For the fourth quarter we expect bookings on a constant currency basis to be 118 million to 132 million and on an as reported basis to be 112 million to 126 million. Please note that these guidance ranges exclude bookings for greater China which represented 3.2 million of bookings in the fourth quarter of 2016. We are guiding GAAP revenue for Q4 to be in the range of $103 million to $113 million and non-GAAP operating expenses to be in the range of $48 million to $52 million. Adjusted EBITDA is expected to be in the range of $14 million to $20 million, adjusted free cash flow to be in the range of negative $4 million a positive $4 million. The Q4 guidance provides a tight range of annual guidance previously communicated. Turning to Slide 23. In summary, our financials are now more simple and easy to understand, our operational revenue was growing and expenses are decreasing. We are consistently generating positive adjusted free cash flow, we have put ourselves in a position to further increase profit and generate additional cash. And I'll turn it back to Louis for closing earmarks. Louis Hernandez Jr.: Thank you Brian. Now I'll wrap things up. You've heard me talk in the past about the significance transformation we undertook to business in Avid to succeed in the future. Took our brands put them on accounting platform, added new applications in higher growth areas. You've heard all about the dramatic changes to the employee base, cost structure, patent portfolio, codebase 65% new employees during the transformation, 37 new patent,70% change in office location it was significant. And there was also a dramatic shift in the economic and composition of the revenues between 2013 and Q2 of 2017, the end of the transformation. With all that now behind us we're well positioned we feel to accelerate revenue, scale profitability and drive higher cash flow. The driver this of course is MediaCentral platform, the most significant piece of technology that we have built in the last few years. Enterprises and individuals alike are taking advantage of this unique cloud-enabled platform that we've built. And operating a system for the entire media workflow and the benefits that it offer, flexible deployment and pricing options for all customers, that makes it an ideal way to participate in the media value chain. And through this single cloud user experience, clients can pick and choose the best application for every step of the workflow all on an integrated and efficient platform and thereby allowing our community to solve the most significant challenges as they navigate the digital transformation. For many, this offers a very unique way for their journey to the cloud in a much more flexible way with a trusted partner. I'm going to turn the Slide 7 now and our strategy going forward 27 – our strategy going forward is to make everything we build work better, invest in areas that make the benefits of our approach more obvious to the market and to get as many people on the platforms as possible, truly shifting to a focus on growth and execution. We get enterprises on the platform with the initial set of applications, they see their total cost of ownership improve as they switch from CapEx to an OpEx model. We increased our wallet share, they expand – as they expand the suite purchasing new products and replacing competitors. And this model – customers save money, have more visibility into their future IT spend, streamline operations and can efficiently add new applications and services as their business evolves. For Avid the result has been a more predictable and scalable recurring revenue stream as the platform and enterprise pricing drive retention and optimize value. Individuals are excited about our subscription prices at entry level premium models, that they provide even more opportunities to see new parts of the market. Our customers are on the platform with subscription applications and we can expand wallet share with additional complimentary plug-ins and app. The growth of our artist community in App Store are also helping drive activity. Turning to Slide 28 we started this journey with an unbelievable brand in distribution in our heritage market. Through MediaCentral we're able to allow our heritage products to operate at a low cost with greater flexibility and we’re able to add new products and services to address the more significant business issues of our customers and allow Avid to participate in higher growth areas to be part of the larger media value chain. Building on that core, we've been shifting to a recurring revenue model driven by enterprise deals and subscriptions, adding new services and opportunities, establishing a model for growth. Our alliance with Microsoft is accelerating our push into the cloud as we lead the industry through this important transition. We started with just a few initial creative products which were announced at IBC just a couple of months ago and are now working with Microsoft to move the entire stack to the cloud. Working with the Avid customer association which by the way is 20,000 members strong and represents the largest media companies, and the most recognized industry professionals working arm in arm on ways to further exploit what we've built, which is helping drive adoption. And with that I'd like to now ask the operator to open the line for questions. Operator?

Thank you. [Operator Instructions] At a time we’ll hear from Steven Frankel from Dougherty.

Good afternoon. I like to start with Jetsen. One of the appeals when you did this deal was the revenue visibility and that they had guaranteed minimums. If they're not going to hit the minimum in Q4, what is any – if anything can you do and how much revenue will you get from them in Q4? And do you renegotiate the deal at this point? Louis Hernandez Jr.: Well I’ll take first part of that Steve. First of all they did hit their minimums in Q3. We believe because of the environment they'll have trouble in Q4. That creates a bunch of options for us, first of all interestingly as you know we did not lower our guidance. And I think that shows that we're feeling confident about the core business and the core operational cash flows that we're seeing. And if you add both the bonus payment in Q3 of $9 million which we've already made and the possible shortfall of Jetsen, it shows you how we're feeling about the base business with the enterprise deals and subscription. In terms of Jetsen, we're working collaboratively with them now on how to improve the outlook for greater China and we're confident we’ll be able to find a comfortable resolution for improving that region.

My understanding that Q4 represented a significant part of their commitment in the first year, right. There was a big hockey stick. So this is a material shortfall relative to where they were supposed to be for the full year. Louis Hernandez Jr.: Yes thanks Steve. So Q4 relative to that contract you’re right. Q4 was certainly – it will be the largest quarter with Jetsen, him but it won't quite hit the contractual minimum into as Louis said, we're working on that with them. Ada tried to do their very best it also evaluates what that means from a contract standpoint.

And what's your expectation as you go into 2018? Do you expect that you might have to reduce your expectations for this business in 2018 as well? Louis Hernandez Jr.: We don't believe we'll have to reduce our expectations for the Greater China region. We’ll evaluate what role Jetsen will play in that.

Okay. Louis Hernandez Jr.: I would remind you that this was an RFP that Jetsen responded to it was a competitive bid to be exclusive provider for that region. There are still just like Microsoft on the cloud side the other cloud providers are very eager to be in their relationship with Avid given the traction that we're seeing with our enterprise deal.

Okay. Well as you talked a lot about this move to subscription in the Tier 3 business. What should we think about for ARPU is this a $5 a month business, a $10 a month business?

I'm glad you asked that. For 2018 when we give guidance we’ll likely be introducing a series of more recurring revenue type metrics like ARR, and possibly MRR, and ACV and ARPU. And we have not given those statistics year. What I will tell you is if you look online you can see that the pricing averages between $30 on Pro Tools per month, just for the application. And around $50 per month for Media Composer. If you want the Cloud Collaboration component, or you’re purchasing for the App Store there's the additional fees, as well as storage which on the free versions you have to use the cloud-baed storage. And so you could add up some of those numbers and get close to what you would expect on a per subscription basis. And we're anxious to provide you more detail and will likely be rolling that in 2018 as more than half of our revenues, and as you know the visibility when you add up the deferred and the backlog a significant amount is visible. We want to share that visibility with you. As you know the bigger piece is the enterprise shift. And so lifetime value ACV on those will be also important. And those are on average increasing meaningfully. If you look at the average deal size that we refer to it for a bunch of media composers and ProTools, compared to what we're spelling now that has got up in multiple in terms of the average deal size and it’s simply moving to enterprise pricing and replacing competitors as we become more prominent within each of our accounts. And that's why a deal like Viacom is so important because Viacom our relationship there wasn't as strong as we would have liked to be there, it’s been moving away from Avid over the years and this was a big statement that they're going to be moving on to the platform and will have an opportunity, I think, to demonstrate our value through additional application. To both of those, I think, Steve we're going to – we're going to want to share more details with you and be able to close ARPU, ACV, ARR type metric.

Okay. And you mentioned ASC 606 a couple of times and given the large amount of deferred revenue you have on the balance sheet, I wonder if you might share with us some early thoughts on what the ASC 606 is likely to do to that deferred revenue balance?

So Steve as you may recall in our 2016 10-A we did disclose our estimate of the $123,116 deferred revenue that would be hair cutted or loss as we moved into ASC 606 effective January1. We said it will be $65 million of that $123,116 deferred revenue balance. Of course when we get the $123,117, it will be north of that $65 million. So the next we have this call we will have provided tremendous amount of detail, footnotes, water folds on what that is. But that's something we’ll disclose in our next call, but again we have given a historical data point relative to deferred revenue at $123,116.

Okay. And could you bridge for me your adjusted free cash flow guidance in Q4 to GAAP?

So I would – so there again, I think, it's going to be very similar where the delta will be, the nonrecurring will be closer to about $2.5 million.

Okay. There’s $2.5 million nonrecurring in your guidance.

That’s right.

Okay. And then maybe comment a little bit on linearity. What was linearity like in Q3 and how do you anticipate the paying on Q4? And do you expect a year end budget flush from the North American broadcasters as you've seen in some past years.

That's a good question. So on linearity, again we feel like we were standing on some very solid foundation with that 70% to 80%. Louis Hernandez Jr.: I guess I was referring to bookings. Yes guy obviously you have because of the deferred revenue and you have good revenue visibility, but in terms of booking.

Yes thanks for the clarification. So on bookings you know that in general our business is more at the end of the quarter, but I can also say that as you look at our bookings forecast for this quarter we feel like we have a strong bookings guidance and so we're bullish and we're hopeful as you mentioned the North America broadcasters that budget flush. We'd certainly like to see that again. And I think our bookings right now is based on historical trends and certainly what we have great visibility to in the pipeline. Louis Hernandez Jr.: I would say the slight change that’s starting to occur Steve is that these larger enterprise deals have a longer sales cycle. So our forecast for Q4 which is a transition we're going through probably includes the last reliant deals that will come up and close in the quarter as opposed to a pipeline of enterprise type deals that we've been working on for a few quarters that are scheduled to close, usually aligned with the budget cycles that have been approved. When you move to enterprise deals and you're signing multimillion dollar and a couple that we highlighted for instance five plus million in each case type of deal they typically will go through a different approval process which will have had to be qualified before we get into the scoping, because it's a true enterprise deal. So it's less likely – we will still see a budget flush point solution, but more of our clients are buying the enterprise deals. So the enterprise deals they are less tied to kind of the rush at the end of the quarter to get discounts to close out and more tied to a strategic longer sales environment where we're predicting that type of close. And because the delivery requires much more effort, the pricing is usually tied to delivery. So in other words if we qualified you in quarter one to close in Q4, we would have had to qualify your budget, because to kick off your project in Q1 we have to set aside a certain amount of people to deliver, because it's not like the old days where we deliver some media composers plug them in and make sure they work and we lead. This is a true enterprise piece of software that requires a fairly significant amount of integration. So the sales cycle, I think, in that way is more predictable for us because we’ve been developing it more collaboratively, There still this point solutions that are going to be purchased at the end of the quarter and we will take advantage of any excess capital flush that occurs towards the end of the year. And I do expect that that would happen. We have new tech like 4K or some of our graphics at AR where a lot of people want to get their hands on those pretty quickly and we're seeing a kind of a microburst there on some of the point solutions along with NEXIS, NEXIS is doing very well for us.

Great thank you. I’ll let somebody else ask some questions. Louis Hernandez Jr.: Thanks Steve.

At this time we’ll move along to Matt Galinko with Sidoti.

Hey good afternoon guys congrats on the quarter. Can you opine on where you see recurring bookings or what do you see recurring bookings looking like in the mix in 2018?

Yes, so we haven’t Matt as you know we haven't provided that really guidance on 2018, but I do think that the trends that you've seen, I think, we're looking for consistent trends. We don't see anything dramatic. The trend line will continue. Louis Hernandez Jr.: I mentioned Matt in the Steve’s question about the lengthening sales cycle. And you remember early in the enterprise it made it harder for us to predict when deals will close. So you’ll notice that we have a handful ten to maybe five to fifteen deals closing every quarter now. I would not expect that change. And based on the visibility we have we would expect that you would see a steady increase in the percentage of recurring booking. And that would come from both – largely from enterprise but also the individual market which is starting to become a meaningful number when you add up the digital sales and subscription. And I mentioned for the first time, I think, the artist community, something that’s been in the public market for some time. But gets to grown fairly significant it’s 30,000 people now are in this community where you meet other artists and to collaborate with them like if I like something you've done before, I introduce you to a session using one of our creative tools. To do that you actually have to have our creative tool. And so that's proven a way to generate interest because you want to interact with the other person we give you a free that's where the downloads come in, you use it. And then what happens is people start to convert over to the pay. So that little ecosystem of cloud-based collaboration, the artist community where you can meet other people and free tools, is proving to be a very effective low cost acquisition tool for paid subscribers. So we think that both of those will continue to drive up that percentage of bookings that are recurring in nature.

Got it, thanks for that. You mentioned Ultra HD work flows being part of, I think, NHK enterprise deal. Do you expect Ultra HD to be more of a driver in 2018?

Yes I think what I love about this if you think about this for a second and you think about a workflow and if you drew six circles on your piece of paper from left to right. And each of those circles work really represents another vendor. So you're going to need your editorial suite to be 4K, you're going to use your mixing suite, your MAM system, your production asset, your play out. The nice thing about Avid and I think why we won this deal with NHK, is instead of having each vendor do it 4K-enabled piece, they can go to one vendor siting on a common platform and we have to think about the integration between them all because we have all those applications. And that's what really drove NHK which as you probably know was a leader in 4K. They developed systems internally we are going to be their first externally developed 4K workflow provider. And which is a fairly significant contract which of course leads to 8K down the road. But NHK, I think, is a precursor especially with the Tokyo Olympics coming and all the broadcasters they're all going to have to get ready before then, at least the ones who have licensing rights because it’s the requirement. And so the nice thing about it is when you have microburst application like 4K that are going to drive buying behavior, you cause a new decision for somebody like NHK. And when they see the option we have, where you can do it this way more efficiently, I think, we're in a very good place to see an acceleration for those enterprise deals. So this contract started with a 4K discussion on the editorial suit. It ended up in a large enterprise deal across many applications and we're hoping that things like graphics which is surging augmented and virtual reality 4K top of mind to a lot of people along with Cloud, those create new decisions and we want to get in there and say we can meet your short-term need, but we can also do it in a more efficient way because we have this operating system underneath the whole thing.

Got it, alright, thank you.

Thanks Matt. Louis Hernandez Jr.: Thank you Matt.

Will now move to Hamed Khorsand with BWS Financials.

Hi just a few questions here. First off, can you provide some details as to what the benefits have been so far if any from the Microsoft partnership? Louis Hernandez Jr.: Sure this is Louis again. Thanks for calling. Hamed the – as you remember we did an RFP. So most of the major providers formally bid, we had interest from Huawei and Ali [ph] and all the Chinese vendors as well. Ultimately we select the – I mean we selected Microsoft as our preferred vendor. Remember it’s an open system. So all vendors will be certified eventually, but we selected and AWS and Google had some very fine attributes as did Huawei and Kenceng also has very strong features. The reason we like Microsoft is they had the largest commitment to the cloud overall you probably know their larger than in terms of data centers and capabilities, than both ASW and Google. They had a the largest team in media and entertainment. And they had a path that was already priced out to move from private through public cloud including hybrid. And they already had the pricing model. So for most of our large media enterprises the appeal of reducing your total cost of ownership on the cloud is muddied by the concerns over packet sizes, security and the total cost. And instead of flipping right to public, which most pure play providers will force you to do, Microsoft had already thought through a way to extend Microsoft licenses to include Azure you can run it at a week on top of your ActiveX directory which means for you from a security basis that look just like you're running it today, but you're running the cloud environment, you commenced our applications right on top and then start to migrate component when you're ready. Services, then the assets, et cetera. And so we felt like they were in a better position to help very large media enterprises move over time to the cloud when they're ready as opposed to being forced to either add another service stack through BM [ph] forgo pure play public and have a bunch of questions. Now the reason this was so interesting to everybody is Avid has almost 600 terabytes storage on-prem, it's massive. And if you think about half of the total Internet volume, right now is through NetFlix just streaming. If you were to move the production of those assets it would increase dramatically the total cloud volume. Ao Avid has a very, very large footprint because of the nature of our clients are huge. And if you start moving production to the cloud the cloud guys got very, very excited. And that excitement was reflected in the degree of aggressiveness that Microsoft responded to our RFP and that is in the form of training subsidy dollars for development efforts, investment and proof-of-concept with large media enterprises, integrating our Nexus and other products into their Azure platform, where we'll get a piece of that revenue in the future. And so they were the most attractive we felt operationally. They were the most aggressive economically and we felt they had the most flexibility for our clients. So that's what Microsoft offered. Scott Guthrie there, who runs Azure [indiscernible] has been involved. And their M&A Bob, Levenhagen they’ve been great and they've been wonderful partners so far and almost anxious to help us accelerate this effort. So I couldn’t say more positive about the type of partners that they've been.

Okay. And then switching gears since Viacom was added in the quarter, how much of their group of employes do they bring on, r add licenses to given they weren’t using you on a full basis. Louis Hernandez Jr.: Yes that's the interesting thing. So let me give you two examples, you have Sinclair, who tried to spend a few station group, went to all station groups and then basically top down said you are all standardized on Avid on these applications. And every time they buy somebody new we have a quick discussion with their pricing. And they step up to do tables and pay us more and add more efficiently. So that’s the Sinclair model. The Viacom model is more like what we normally face. So you have a team there that wants to drive down cost, but they don't want to force each of their individual property, they don't want to mandate a common tool set. So what they liked about us is they can have everybody on the platform and then they want us to go into each of the groups and convince them to buy more applications. Now one thing that was interesting for them is they have become a big Adobe shop over time. The fact that Adobe can run concurrently with media composer [indiscernible] was kind of a stunning shock to them, but it allowed them to not have this religious discussion about which one to use. Now Media Composer is important to us, but it’s a small percentage of the total suite. If we can get your storage and your archive and you MAM system and everything else happy to have you continue to use the Adobe. The interesting that happened once that got us in the door it’s like you don't you don't have to replace Adobe, you can we can work concurrently. That allowed us to have this bigger conversations. So what they’re starting with is Media Central basically, and they were allowing us to go into each of the groups and convince the groups to standardize applications and we don't – they explained internally that you don't have to replace your editorial suite you want to stick to it. And that has actually allowed us to expand our footprint on Media Composer. I just went last week to the first presentation of one of the standalone large groups and I think it was very well received that “corporate” purchased the licenses for MediaCentral and are making them available to the individual groups. And we're not going to group by group and plan and expanding our relationship. So it's different. That's how Viacom is working. And I think the way each of these works it really depends on the culture and the economic pressure which dictates how much these companies are dictating a common footprint like we have, or are working with us to evolve into it over time. I think in the case of Viacom, I would consider this multimillion dollar, multi-year agreement as a small beginning of what’s possible. We can really help them and we're really excited about what does this mean long-term.

So the cash flow recognized in Q3 and if that's the case how long will it take before the next recognition of free cash flow? Louis Hernandez Jr.: Are you talking about Viacom, specifically as a example.

Yes.

Yes, that's a multi-year deal. And I think so in Q3 it was not reflected.

Okay. Alright, that's it from me. Thank you.

Thank you.

Now we’ll take a follow-up from Steven Frankel with Dougherty.

Yes what changes were made to the serves agreement? In other words did you have to pay a higher rate or anything to get this additional borrowing?

So we at the same terms, same interest rate we had to do say a onetime fee. I think in queue we called it out at 700 K, between the incremental $15 million the term and the extra $5 million on the line of credit. So $700,000.

And you talked about the release about the buying backs of bonds is that something that you're likely to do, or that's something that you're contractually able to do? Are you comfortable enough parting with $15 million in cash?

Yes so we've actually been encouraged by various shareholders. And just in general to go consider buying some bonds. And in our conversation with service we realized that we needed to open up a basket to create the option to purchase the convertibles. At the moment the good news is now we have the ability to go do that. But we'll watch the market and do the right thing, as well as watch our cash flow. Louis Hernandez Jr.: Yes and I think what we would say on that fees is we felt that this is a very low cost way to add cushion and liquidity incremental liquidity. We don't think we'll need any of it in the given quarter. And that's why we wanted to have this basket. So if we can opportunistically take advantage of the bond then we would. And we’ll just evaluate that an ongoing basis and make a decision as we progress through the quarter.

Great, thank you. Louis Hernandez Jr.: Thanks Steve.

And we’ll conclude the Q&A Session. At this time I’ll turn it back to management for any additional or closing remarks. Louis Hernandez Jr.: We have nothing further, thank you all for joining us today. And we look forward to speaking to you after our Q4 results.

Once again this does conclude today’s conference call. Thank you all for your participation.